Mutual Fund Distribution
Mutual Fund Industry has evolved to a much larger extent with now 45 Mutual Fund Companies since the setup of Unit Trust of India (UTI) in 1963. Now the Mutual Fund Industry has more 1000 schemes based on the organization structure, asset classes, investment objectives, portfolio management, speciality and risk appetite.
We as a Mutual Fund Distributor are providing a much needed last mile connect with the investors. We as a distributor understand investor’s needs with respect to their risk profile, financial planning and investment time horizon. We then offer them suitable product/s which suit/s them. This is not limited to enabling investors to invest in MFs but also help investors stay on course through bouts of market volatility and thus experience the benefit of investing in Mutual Funds.
We provide technological tools to our investors to view their investment portfolio online at any time and also enable them to further transact in Mutual Fund schemes hassle free.
Systematic Investment Plans (SIP)s
Systematic Investment Plan (SIP) is an approach (Methodology) to invest in Mutual Fund schemes, a fixed amount of money say every month in a pre-determined manner for a long period. SIPs can be started with as little as Rs 500 per month.
The SIPs work on following principles,
Rupee Cost Averaging:
At the time of SIP when scheme’s NAV is high, less number of units are allotted as compared to more units allotted when Scheme’s NAV is lower at the time of SIP Transaction. However, please remember that the Rupee cost averaging does not assure profit, nor does it protect one against investment losses in declining markets. It merely ensures disciplined & regular investment in stock markets, which helps overcome the natural impulse to stop investing in a falling or a depressed market or investing a lot, when markets are buoyant and euphoric.
The Power of compounding:
There is a great advantage in investing systematically over a long period of time. For example, Rs 1000 invested every month for 25 Years results in total investment of Rs 3,00,000 and at an assumed rate of return, say 8%, it can yield Rs 9.57 Lakh after 25 years.
Starting Early Pays Well:
To get the best out of one’s investment, it is most important to invest for the long-term and you should start investing early, in order to maximize the end returns.
We can understand this better through following example:
Let us assume that two friends, both aged 25, decide to invest ₹ 1000 every month for a period of 5 years and earn 8% p.a. on a monthly compounding basis. The only difference is that while one starts investing promptly at the age of 25 itself, the other starts investing 10 years later at the age of 35 years. Both decide to hold on to their investments till they turn 60. So while both of them would accumulate principal investment of ₹ 0.60 Lakh over a period of 5 years, the investment of the person who started early at the age of 25 appreciates to over ₹ 7.30 Lakh, the investment of the second person who started later grows to only about ₹ 3.42 Lakh.
Thus, you can clearly see the difference between the two and the clear advantage of investing early. So go ahead. Start investing through SIP today itself.